How Amazon Is Tony Soprano

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May 27 (Bloomberg) -- Porter Bibb, managing partner at Mediatech Capital, and Roxana Robinson, president of The Author’s Guild, discuss Amazon’s dispute with Hachette Book Group that has blocked pre-orders for forthcoming releases from the publisher and what it means for e-publishing and sales of physical books on the site. They speak on Bloomberg Television’s “Market Makers.”

Bezos decides to flex his muscles?

This is what happened when jeff bezos looks at an antediluvian industry and can't figure out what to do in the digital age.

Would you agree that the book publishing industry is an anachronism that he suggests?

I would not call it antediluvian but i do have some catching up to do.

Amazon is difficult to negotiate, it is like trying to negotiate with tony soprano.

Amazon decides to pick up on book publishing because it is -- this is all about e-books.

E-books are the savior of the book publishing industry because the margin is 75% on an e-book versus 45% on a paperbound, hardcover book.

Itwhen amazon is looking at what apple is going to be doing, competing with them, and when they are looking at what investors say is wrong with amazon, they raise the price on amazon prime.

Now they are going to raise the price on e-books.

They need to generate some profit.

Are e-books really that profitable?

My sense of the publishing industry is that it is in turmoil, if not in crisis, over a lack of profitability?

It is a complicated issue.

They do have that profit margin but you cannot take that as a given because you still have to start out with putting man-hours into editing, copyediting, and publishing the hardcover.

That is all it fixed cause and unless we give up hardcovers altogether that is built into the cost of the e-book.

How did the industry respond?

Is there any way to do battle with amazon?

A lot of our members are hash at -- are chachette authors.

55 books written by one person?

Extremely prolific.

We support them and we resist what amazon is doing.

These are thuggish tactics designed to intimidate.

They are in punitive.

Is their solidarity between the authors and the publishers?

I'm no authority but as i understand that the relationship between the publishing houses and the authors is not always great.

The book publishers are not losing money, authors are.

Especially independent authors and new authors are finding it very difficult to get into print , whether it is electronic digital print or hardcover print.

They are caught in the crossfire and they can do nothing here.

So the authors are powerless, the book publishers seem weak.

It is like david up of goliath in amazon.

-- it is like david against goliath, with goliath in amazon.

One of the problems is they are mirroring what is going on right now, which roxanne can talk about the doj's resolution of the apple with the same publishers.

Barnes & noble gets a display allowance, extra margin to put the books on display and in the windows.

Amazon wants to give advance notice or book orders before the publishing date.

We should get a little better premium in the margin.

There is no consistent see in the book publishing business.

-- no consistency in the book publishing business.

It is a huge corporation with a lot of leverage.

Why aren't they in the e-book business themselves and raking in all those margin profits?

It is a good question because amazon has taken over distribution and marketing and trying to get into the publishing business it self.

It would make sense for publishers to offer it directly.

Hachette is standing up to this, they have not caved in.

What we understand is other publishing houses will be in the same position shortly.

If they stand up to amazon as well one by one and amazon removes thereby button, amazon will be -- removes their buy button, amazon will be-- many people are on amazon because it is convenient.

Are they going to another bookseller?

Kluck's they are doing it.

There are a lot of other sites you can get books.

-- they are doing it.

There are a lot of other sites you can get books.

Books are not commodities.

You will never be able to substitute a cheaper book for war and peace.

It is only war and peace you want.

If amazon does not give it to you you do not go somewhere else.

What's to stop amazon from doing it with golf clubs?

They are a tough negotiator but they are just like any other retailer.

They want their competitive margins.

Cooks up until now they haven't had one of their competitive margins.

Their margin is one percent.

Is focused on apple, which is not mentioned.

Apple is cutting its own deal with the publishers.

Amazon probably knows with those deals are.

They are not going to give up until they get it.

In a word, yes.

Thank you very much.

This text has been automatically generated. It may not be 100% accurate.

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